China Inc. On Huge Foreign Buying Spree

China’s companies are fast finding ways to spend, snapping up raw materials across the globe while those assets are cheap.

Chinese companies have been have been gulping down tens of billions of dollars worth of key assets in countries as varied as Iran, Brazil, Russia, Venezuela, Australia and France, the Washington Post reports.

Chinese companies poured $16.3 billion into foreign assets during January and February. If that pace continues, total overseas acquisitions could almost double last year’s total of $52 billion.

The assets are available at bargain-basement prices thanks to the financial crisis. As a result, China has garnered oil, minerals, metals, and other strategic natural resources necessary to sustain its economic expansion.

“That China started investing or acquiring some overseas mineral resources companies with relatively low prices during the global economic crisis is quite a normal practice,” Xu Xiangchun, consulting director for research firm Mysteel.com, tells The Post.

“Japan did the same thing in its prime development period too.”

It’s an early sign that China Inc. is gearing up for the next big surge of growth. Chinese demand for iron ore, food, and oil drove up the costs of those commodities at the tail end of the last boom.

As the U.S. and Europe continue to slide commodities should fall, but Chinese buying is buoying commodities instead, creating global stagflation. Western consumers have less money, but prices rise anyway.

The massive size of China’s purchases has swayed energy markets. It also has sparked concern that China will hoard commodities, lifting their prices and making them unavailable to other countries, including the United States.

China’s companies are fast finding ways to spend, snapping up raw materials across the globe while those assets are cheap.Chinese companies have been have been gulping down tens of billions of dollars worth of key assets in countries as varied as Iran, Brazil, Russia,...